As the internet reaches deeper and deeper into our lives, we’re becoming more dependent on it. Simultaneously, we’re also entrusting an ever-increasing amount of our personal information to it.

Most reputable companies take steps to safeguard that information and prevent access to any personally identifiable data. But, if recent events prove anything, it’s that there are never any guarantees.

It’s impossible to have full control over what 3rd-parties may do to gain access to your legitimately-shared data. But there are some steps that any internet user can take to anonymize and protect their online activities. One of the most popular ways to do that is by using a virtual private network (VPN) service.

Unfortunately, there are plenty of misconceptions about the way VPNs work. One of the most common ones revolves around the impact that a VPN will have on total data use. This also includes any ISP or wireless carrier imposed data caps. To demystify this oft-confused topic, here’s a guide to everything you want and need to know about VPNs and data usage.

What Is a VPN?

A VPN, as its name implies, creates a network-within-a-network to privatize data traffic passing to and from a client. A typical VPN setup involves the installation of client software on a user’s device. That software then establishes an encrypted tunnel to an endpoint server run by the VPN provider. In most cases, all traffic from the user’s device would use that tunnel to reach the wider internet.

Depending on the type of encryption that a VPN service uses, it can be impossible (or at the very least exceedingly difficult) for any 3rd-party to intercept and view a users’ traffic.

Some VPN providers also disable traffic logging. They ensure there is no record kept of what traffic belongs to which user of their system. In these cases, the VPN provides near-perfect anonymity for the user and excellent protection of their information.

Does a VPN Use Data?

A VPN, like any other internet-connected resource, does send and receive data. It relies upon an existing internet connection to provide the route between the user’s device and the VPN endpoint server. That means that your ISP can and does still count any traffic which passes over the VPN towards any data caps or other restrictions.

What your ISP can’t do when you use a VPN is to see the contents of your internet traffic. That means that they won’t be able to apply any restrictions or throttling based on what service you’re using. This makes VPNs particularly useful tool for anyone who has have found that specific services (like BitTorrent or Netflix) are speed restricted by their ISP.

Does a VPN Increase Data Usage?

When you are using a VPN, your data usage will increase. The encryption that a VPN applies to keep the connection secure will generally grow the size of the transmitted data anywhere from 5%-15%.

Most commercial VPN providers make use of compression to try to offset the overhead. Unfortunately, it’s mostly a losing battle. Though granted, providers like CyberGhost VPN seem to be doing a better job of it than others.

While compression can occasionally decrease the size of the encrypted data, most types of internet data don’t compress well. For example, traffic to and from an SSL-secured website (HTTPS) is typically compressed already by the web server the site lives on. That means that the VPN’s built-in compression will have little to no effect on it.

The same is true for streaming video and almost every other kind of internet traffic. The one exception is simple, unsecured text (but really, how much of that do we send these days).

Which VPN Protocol Uses the Least Data?

Although any encryption will increase data size, not every encryption standard is created equal. If you’re concerned with keeping overhead at a minimum, choose the standard wisely. It will make a difference.

Most top VPN providers offer the same handful of encryption options. Here is a list of those standard types, ordered from least data usage to most:

128-bit PPTP – Low Data Use, Poor Security

128-bit L2TP/IPSec – Low Data Use, Moderate Security

128-bit OpenVPN – Low Data Use, Moderate Security

128-bit Stealth OpenVPN – Moderate Data Use, Moderate Security

256-bit L2TP/IPSec – Moderate Data Use, Excellent Security

256-bit OpenVPN – Moderate Data Use, Excellent Security

256-bit Stealth OpenVPN – High Data Use, Excellent Security

As you can see, PPTP encryption is the most data efficient. However, it’s important to note that it is considered to be insecure and therefore should pretty much be avoided. Most VPN providers only support PPTP to maintain good compatibility across different devices.

The 128-bit and 256-bit stealth options also stand out. They use SSL encapsulation to make it seem like the VPN traffic is nothing but standard HTTPS traffic. While this does help to avoid VPN restrictions (be it by your school, ISP or even at the government level), it will also increase the payload data size.

The Protocol to Pick

For the average internet user, choosing 128-bit OpenVPN encryption provides the perfect mix of security and low overhead.

For all practical purposes, the type of encryption used by the OpenVPN protocol is currently unbreakable even with 128-bit keys. But those that opt for the 256-bit options should note that the additional security does come at a cost.

Encryption which makes use of 256-bit keys will perform on average about 40% slower than the same encryption type using 128-bit keys. That’s far from insignificant. Even if you’re using one of the fastest VPN providers, the difference will be noticeable. It’s an especially important factor to consider if you’re using your VPN for applications where speed matters, like streaming video.

Does Using a VPN Count Against Data Caps

As indicated earlier, a VPN does rely on your ISP to send data to and from the internet. Even though your ISP cannot determine what it is you are doing online via your VPN connection, they can measure the amount of data that is passing through their network. That means using a VPN will count against any data caps that apply to your regular internet service.

In fact, because a VPN increases the size of the data you send over your internet connection, you may find that your data cap becomes more restrictive than ever.

Of course, not every data cap works in the same way. Some ISPs (or wireless providers) sell data packages that include a pre-set amount of data transfer. If you run out, you cannot use your internet service until you purchase another block of data.

Others do not disconnect you when you reach the pre-set limit. They instead curtail your connection speed until your billing cycle completes or you purchase more data. In the case of the latter, your VPN will continue to function, but at a far slower connection speed.

Can a VPN Bypass Data Caps?

Many people explore VPN services as a means of bypassing data caps set by their ISP or wireless provider. As noted above, a VPN relies on your ISP to send data to the internet. So, avoiding the ISPs data caps is not possible – at least most of the time.

The only time a VPN may help to avoid a data cap is when the ISP restricts data based on the type or destination of the data itself.

ISPs and Data Inspection

Late last year Verizon Wireless users started to notice that their access to Netflix was far slower than other online services. It turned out that Verizon had been intentionally restricting connection speeds to the video streaming service. Users speculated that Verizon was preparing to introduce a tiered data system. In doing so, they would show preference to specific services, while crippling others.

Although Verizon didn’t push things further (at least for now), it’s a perfect example of a situation when a VPN could be useful in avoiding ISP restrictions on specific sites and services.

With a VPN, Verizon wouldn’t have been able to detect traffic that was destined for Netflix. It, therefore, couldn’t have blocked or throttled it. With the countdown to the death of net neutrality in the United States underway, ISPs could begin blocking data in this way in the very near future. Using a VPN may be one of the few options most of us will have to prevent that practice.

Data is Data, Even on a VPN

VPNs are an excellent tool to increase your privacy and security online. They won’t, however, decrease your data usage or prevent your ISP from tallying your monthly data totals. In fact, even the very best VPN providers are almost guaranteed to increase how much data you use, no matter how you configure them.

That said, for most users, the tradeoff is definitely worthwhile. Yes, you may see a slight bump in data usage when connected to a VPN. But for me personally, the privacy and online freedom services like NordVPN provide are well worth it. I would have to think long and hard before I ever considered giving that up.

About The Author

Tim is the creator of Fastest VPN Guide. He comes from a world of corporate IT security and computer networks and knows a thing or two about what makes VPNs tick. If anyone can tell you exactly what separates the great from the not so great, it's Tim.